Here's Why Jiangsu Huahong Technology (SZSE:002645) Can Afford Some Debt
Here's Why Jiangsu Huahong Technology (SZSE:002645) Can Afford Some Debt
Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility of prices, but whether you will suffer a permanent loss of capital.' When we think about how risky a company is, we always like to look at its use of debt, since debt overload can lead to ruin. We note that Jiangsu Huahong Technology Co., Ltd. (SZSE:002645) does have debt on its balance sheet. But the more important question is: how much risk is that debt creating?
传奇基金经理李露(由查理·芒格支持)曾经说过:“最大的投资风险不是价格的波动,而是你是否会遭受永久的资本损失。”当我们思考一家公司的风险有多大时,我们总是喜欢考虑其债务的用途,因为债务过载可能导致破产。我们注意到,江苏华虹科技股份有限公司(深圳证券交易所:002645)的资产负债表上确实有债务。但更重要的问题是:这笔债务会带来多大的风险?
When Is Debt A Problem?
债务何时会成为问题?
Generally speaking, debt only becomes a real problem when a company can't easily pay it off, either by raising capital or with its own cash flow. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers. However, a more usual (but still expensive) situation is where a company must dilute shareholders at a cheap share price simply to get debt under control. Of course, debt can be an important tool in businesses, particularly capital heavy businesses. When we examine debt levels, we first consider both cash and debt levels, together.
一般而言,只有当公司无法通过筹集资金或用自己的现金流轻松还清债务时,债务才会成为真正的问题。资本主义的组成部分是 “创造性破坏” 过程,在这种过程中,倒闭的企业被银行家无情地清算。但是,更常见(但仍然昂贵)的情况是,公司为了控制债务,必须以低廉的股价稀释股东。当然,债务可以成为企业的重要工具,尤其是资本密集型企业。当我们检查债务水平时,我们首先要同时考虑现金和债务水平。
How Much Debt Does Jiangsu Huahong Technology Carry?
江苏华虹科技背负了多少债务?
As you can see below, at the end of September 2023, Jiangsu Huahong Technology had CN¥1.16b of debt, up from CN¥699.9m a year ago. Click the image for more detail. On the flip side, it has CN¥950.0m in cash leading to net debt of about CN¥205.1m.
如下所示,截至2023年9月底,江苏华虹科技的债务为11.6亿元人民币,高于去年同期的6.999亿元人民币。点击图片了解更多详情。另一方面,它拥有9.50亿元的现金,净负债约为2.051亿元人民币。
![debt-equity-history-analysis](https://usnewsfile.moomoo.com/public/MM-PersistNewsContentImage/7781/20240224/0-6d79bef564c27c0c5c733351b90a16ea-0-14f6cd84675546d493e4eab882a3d20b.png/big)
A Look At Jiangsu Huahong Technology's Liabilities
看看江苏华虹科技的负债
According to the last reported balance sheet, Jiangsu Huahong Technology had liabilities of CN¥1.44b due within 12 months, and liabilities of CN¥753.0m due beyond 12 months. Offsetting these obligations, it had cash of CN¥950.0m as well as receivables valued at CN¥658.9m due within 12 months. So its liabilities total CN¥580.5m more than the combination of its cash and short-term receivables.
根据上次报告的资产负债表,江苏华虹科技的负债为14.4亿元人民币,12个月以后到期的负债为7.530亿元人民币。除这些债务外,它有9.50亿元人民币的现金以及价值6.589亿元人民币的应收账款将在12个月内到期。因此,其负债总额比其现金和短期应收账款的总额高出5.805亿元人民币。
Given Jiangsu Huahong Technology has a market capitalization of CN¥4.69b, it's hard to believe these liabilities pose much threat. But there are sufficient liabilities that we would certainly recommend shareholders continue to monitor the balance sheet, going forward. The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately the future profitability of the business will decide if Jiangsu Huahong Technology can strengthen its balance sheet over time. So if you're focused on the future you can check out this free report showing analyst profit forecasts.
鉴于江苏华虹科技的市值为46.9亿元人民币,很难相信这些负债会构成很大的威胁。但是,有足够的负债,我们肯定会建议股东今后继续监督资产负债表。资产负债表显然是分析债务时需要关注的领域。但最终,该业务的未来盈利能力将决定江苏华虹科技能否随着时间的推移加强其资产负债表。因此,如果您专注于未来,可以查看这份显示分析师利润预测的免费报告。
Over 12 months, Jiangsu Huahong Technology made a loss at the EBIT level, and saw its revenue drop to CN¥7.3b, which is a fall of 13%. We would much prefer see growth.
在过去的12个月中,江苏华虹科技在息税前利润水平上出现亏损,收入降至73亿元人民币,下降了13%。我们更希望看到增长。
Caveat Emptor
Caveat Emptor
Not only did Jiangsu Huahong Technology's revenue slip over the last twelve months, but it also produced negative earnings before interest and tax (EBIT). Indeed, it lost CN¥216m at the EBIT level. When we look at that and recall the liabilities on its balance sheet, relative to cash, it seems unwise to us for the company to have any debt. Quite frankly we think the balance sheet is far from match-fit, although it could be improved with time. Another cause for caution is that is bled CN¥99m in negative free cash flow over the last twelve months. So to be blunt we think it is risky. There's no doubt that we learn most about debt from the balance sheet. But ultimately, every company can contain risks that exist outside of the balance sheet. We've identified 1 warning sign with Jiangsu Huahong Technology , and understanding them should be part of your investment process.
在过去的十二个月中,江苏华虹科技不仅收入下滑,而且还产生了负的息税前收益(EBIT)。事实上,它在息税前利润水平上损失了2.16亿元人民币。当我们审视这一点并回顾其资产负债表上相对于现金的负债时,对我们来说,公司有任何债务似乎是不明智的。坦率地说,我们认为资产负债表远非匹配,尽管可以随着时间的推移而改善。另一个需要谨慎的原因是,在过去的十二个月中,自由现金流为负9,900万元人民币。因此,坦率地说,我们认为这是有风险的。毫无疑问,我们从资产负债表中学到的关于债务的知识最多。但归根结底,每家公司都可以控制资产负债表之外存在的风险。我们已经确定了江苏华虹科技的1个警告信号,我们知道它们应该是您投资过程的一部分。
If you're interested in investing in businesses that can grow profits without the burden of debt, then check out this free list of growing businesses that have net cash on the balance sheet.
如果你有兴趣投资能够在没有债务负担的情况下增加利润的企业,请查看这份资产负债表上有净现金的成长型企业的免费清单。
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